Wednesday, August 13, 2014

Raising The Miniumum Wage Will Not Eliminate Poverty

President Obama and his Socialist pals in government support raising the Minimum wage as a remedy to increased poverty and falling Middle Class income, even though the Congressional Budget Office says it will cost 700,000 jobs.   The problem is that raising the Minimum Wage will push even more manufacturing jobs overseas, cause companies to automate more jobs and raise prices, hurting the very people Socialists are trying to help most. 

The fact is that very few people in the United States actually earn the Minimum Wage today because both job skills and the market determine wages, not federal, state, or local law.   Most Minimum wage jobs are entry level positions requiring little or no training.   Many of these jobs are part time and filled by young people, or students under 18 years of age.  Most important, anyone earning the Minimum Wage is getting paid what they are worth.   People working in Fast Food are so unskilled that they not even trusted to make change.  Instead the registers tell them what to give back to the customer based on the purchase price and the amount of money paid in for the purchase.   If wages were raised to $15 an hour, many of these jobs would simply be eliminated.   Fast Food companies would move to automated tellers. 

Rather than focusing on the Minimum Wage, what we should be focusing on is reforming the corporate tax system to allow for more good paying job creation in the United States.  Unleashing our Energy Sector, in particular, to create millions of good paying jobs that cannot be off-shored, so that our country can become energy independent would be key to this process.  And, we must insist that kids coming out of high school either be college bound, or on their way to learning a valuable trade.  Not all kids are college material and if they happen to be a minority, it is not racist to say so. There is certainly nothing wrong with becoming a plumber, electrician, or carpenter. 

Today about 12% of the White population lives in poverty.   26% of the Black population lives in poverty, both despite spending trillions of dollars on the War On Poverty since the Great Society.  Clearly, many of these big government programs have failed to eliminate poverty.  Simply raising the Minimum Wage will do little to deal with poverty, or income inequality.   Only Free Market Economics can lift all boats as it always has done in the past.  We need lower taxes, less regulations and smaller government to deal with poverty.  It will not happen any other way.

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